no because i tested it on my friend who had 12000 defense. and after conviction he had like 11000. with like a lvl 3 conviction...

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I don't think there is a PvP penalty for Conviction lower defense effect. A slvl 3 conviction should reduce his DR by 61% to 4680. There might be a display problem, I know one existed for the lower resistance effect.

CoS's defense bonus is treated differently from any other defense modifier (except RibCracker's defense bonus, which is additive with CoS's bonus). Hence, it is multiplicative, not additive, with other defensive modifiers, such as Defiance and Shout.